Slowly but steadily transforming the way we eat, the global foodtech industry is expected to be worth $250 billion by 2022. Marley Spoon is part of this trend. The Berlin-based foodtech startup delivers fresh ingredients along with recipes directly to customers’ doors, so that they can cook quality meals from home without having to go to the supermarket. Customers can choose from up to twenty different, healthy recipes every week on Marley Spoon’s platform, with appetizing options such as, “Sausage & Squash Pan Roast” or “Skillet Ravioli Lasagna”.
Since it was founded in 2014, Marley Spoon has expanded to seven countries, and now employs over 800 people worldwide.
A serial entrepreneur and food enthusiast, co-founder and CEO of Marley Spoon Fabian Siegel shares with us his experience in founding Marley Spoon, its rise to success, and the evolution of foodtech.
Can you tell us a bit about your background and how you came to found Marley Spoon? What inspired you to start the business?
My journey as an entrepreneur started back in 1996 when I launched Germany’s first online auction house, Auktionet with a couple of friends. In 2000, I joined the online payment brand ClickandBuy, where I served as CTO for seven years, and during that period I moved to the US. There, I went on to launch Strateer, a financial services startup. My passion for food eventually led me to become involved in the launch of Delivery Hero as a co-founder and CEO. I left the company in 2013 to become a partner at the venture capital fund Global Founders Capital.
“Our love for food paired with the belief that cooking does not have to be overly complicated or time-consuming is what made us want to launch the business.”
Realizing that I enjoy building companies with people, I founded Marley Spoon a year later with my childhood friend and business partner Till Neatby. Our love for food paired with the belief that cooking does not have to be overly complicated or time-consuming is what made us want to launch the business. People have a desire to cook at home, but often lack inspiration, time or motivation. This leads to the same six meals being cooked on rotation. Marley Spoon offers the perfect solution: Our customers get the ability to choose from multiple, weekly-changing recipes which are delivered with the fresh ingredients in exact quantities, to cook at home. This concept aligns with the mission we’ve had since day one: Bring delightful, market-fresh and easy cooking back to the people. The result: More time for family and friends, and freshly cooked, varying meals every day.
How have you seen the foodtech industry change since you started Marley Spoon?
The biggest change we have seen is in consumer behavior. There is a continuous shift in groceries from off- to online, as customers trust more in online shopping, which has led to the rapid growth of the foodtech industry. Purchases are made directly between customer and online retailer, with the lengthy supply chain being shortened. As the name suggests, foodtech businesses employ technical advancements to meet consumers’ needs and provide an overall more convenient product than traditional ‘brick-and-mortar’ stores. The foodtech industry aims at making the consumer’s life easier, while offering them cheaper alternatives to offline supermarkets. We can expect this trend to grow even further over the next couple of years.
What differentiates Marley Spoon from other foodtech startups?
The foodtech industry is vast and offers solutions to a large variety of issues. We positively encourage the development of this industry, for example Amazon’s recent launch of AmazonFresh, as we see us all of these efforts as supporting the switch from offline to online shopping.
The meal kit model is at the heart of this change, improving elements of the grocery sector that other food-tech models do not address. The source-to-order system means that we incur considerably less food waste at the point of manufacturing than traditional source-to-stock retail businesses. Combine this with the fact that customers vastly reduce their own household waste with our product, and an impact is seen throughout the whole system. Additionally, our business has a smaller impact on land pollution, requiring only one fulfillment centre per market, and uses optimised delivery routes to reduce time on the road. All-in-all, we are inherently able to make positive environmental impacts, and also employ additional measures in our day-to-day operations to reduce waste.
What was your experience like scaling up? What are some of the challenges you have faced, and did you respond to them?
At Marley Spoon we employ the turtle approach to our growth. Over the course of four years, we have expanded into seven markets globally and have only employed marketing efforts that fit with our ethos of ‘slow and steady wins the race’. We believe that by following this method, we will be able to retain quality customers that will be with us in the long term, as this fulfills our ambition to impact the way people buy and cook food on a global scale.
One of the early and most significant challenges we faced was figuring out the best model for our customers. Marley Spoon started with a shopping basket model, however we found that although customers loved the product, they were more inclined to use it for special occasions than as a regular dinnertime solution. The result of this: the business did not grow. We had to rethink our strategy, and moved to a subscription model. Crucially though, we wanted to create a subscription that was flexible and would fit into our customers lives, fulfilling the promise of convenience. This model worked much better, as it targeted customers that were looking for a more regular solution to their problem, instead of just a short-term one. Marley Spoon became a weeknight cooking solution for customers across the globe.
What do you see as the main ingredients in your success?
The team. Our number one value at Marley Spoon is ‘to build the best team’, and it’s something that we put a lot of effort into collectively and pride ourselves in. Over the course of the past few years we have built a multi-cultural hub of experts from all walks of life, who work tirelessly to create a product that truly delights the customer. Every Marley Spooner has the customer firmly in their mind when doing their daily tasks, whether that’s creating new menus using recipe ratings, adjusting the user experience of the website following market research, or hand-packing the boxes in the fulfillment centre – it’s a business built from enthusiastic, knowledgeable and entrepreneurial people. The heart of Marley Spoon’s success is the people behind the box.
You raised more than $90 million since you started in 2014. What was your experience like raising funds, and what advice would you give to other startup founders looking for funding?
The grocery industry is the last vertical to move online. This puts us in an exciting place when it comes to raising money. We have a business model that is changing perceptions, moving into a new space and really making a difference to the way the food industry works. We have been very fortunate to have been supported by a variety of investors who truly believe in Marley Spoon’s business model and mission.
However, it has not all been only smooth sailing, and it’s important to understand the global investment landscape when moving into a financing round. This has been our biggest lesson over the past few years – you can have the most convincing, exciting and successful business in your hands, but if you do not keep the market in mind, you will not succeed.
What impact has your recent IPO had on Marley Spoon?
The recent IPO was an exciting milestone for us to make, especially as such a young company. We had seen some other businesses in the meal kit industry also go public in recent years, so it was also very interesting to see how it would be received on the stock market.
In terms of what it’s changed in the company – nothing. We still work everyday towards our mission of providing people with delightful, market-fresh and easy cooking…while building a sustainable supply chain for a waste-free world.
What plans do you have for the future, and where do you hope to see the company in 3-4 years?
Our main focus at the moment is to grow in the markets that we are already in and provide even more households with a convenient cooking solution, while revolutionising the global food industry. As the business continues to scale, this means investing in our brand positioning, our manufacturing processes and maintaining a strong company culture whilst bringing in new talent to help us learn and grow in the right direction.